CIMB Raises $1.09 Billion With New Stock Sale to Fund Growth

CIMB Group Holdings Bhd. (CIMB), Malaysia’s second-largest bank by assets, raised 3.55 billion ringgit ($1.09 billion) selling new shares to fund growth.

The Southeast Asian lender sold 500 million shares at 7.1 ringgit each, according to a media statement. That’s a 2 percent discount to the average stock price on Jan. 10. The stock was halted in Kuala Lumpur this morning pending the announcement.

The lender and larger competitor Malayan Banking Bhd. have been expanding overseas as the Association of Southeast Asian Nations opens the region’s markets as it seeks to create an economic zone modeled after the European Union by 2015. The capital-raising was necessary after last year’s slump in the Indonesian rupiah hurt CIMB’s plans, according to Chief Executive Officer Nazir Razak.

“While we have always sought to operate at optimal capital levels, the sharp depreciation of the rupiah over 2013 has set back our capital-accumulation plan,” said Nazir, according to the statement. “We have acted decisively to reposition our capital for growth.”

CIMB owns banks in countries including Indonesia and Thailand, and bought most of Royal Bank of Scotland Group Plc’s Asia-Pacific cash equities and investment banking units in 2012 to extend its regional reach.

The new shares are equivalent to 6.08 percent of the enlarged share capital, CIMB said. The offer was oversubscribed, enabling CIMB to increase the deal from 400 million shares to 500 million shares, it said.

The rupiah was the worst-peforming currency in Asia last year, slumping 21 percent as Indonesia’s current-account deficit reached a record in the second quarter, and the U.S. Federal Reserve began to taper its stimulus program.

To contact the reporters on this story: Sanat Vallikappen in Singapore at vallikappen@bloomberg.net; Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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